In the case of Robins Dry Dock & Repair Company v. Flint et al., 1927, the U.S. Supreme Court ruled that a party cannot claim damages for economic loss if they have not suffered physical damage or injury themselves. The dispute arose when a ship under charter to Flint was damaged while in dry dock for repairs by Robins Dry Dock & Repair Company and as a result, could not fulfill its contractual obligations with Flint due to delay caused by additional repair time needed after an accident at the dry dock. Although no direct harm had been inflicted upon Flint, they sought compensation from Robins for their financial losses resulting from breach of contract with third parties due to delayed delivery of goods because of extended repair time on the vessel. However, Justice Oliver Wendell Holmes Jr., writing for the court majority held that "a tort to the person or property does not include unintentional harms which are purely economic." This ruling established what is known as 'the rule' in American jurisprudence regarding recovery for pure economic loss in negligence cases.

In the dissenting opinion for Robins Dry Dock & Repair Company v. Flint et al., Justice Oliver Wendell Holmes Jr. argued that the majority's decision was too narrow in its interpretation of maritime law and failed to consider broader principles of justice and fairness. He contended that, while there may not be a specific precedent allowing for recovery in this particular situation, it does not mean one should not exist. The plaintiff suffered real economic loss due to negligence on part of the defendant, which under general legal principles would entitle them to compensation. Therefore, he believed that denying recovery simply because no exact precedent existed was unjustified and overly rigid application of maritime law.